London court green-lights worldwide seizure of earlier undisclosed assets of PrivatBank’s ex-owners

3 February, 07:00 PM
Former shareholder of PrivatBank Ihor Kolomoisky (Photo:NV)

Former shareholder of PrivatBank Ihor Kolomoisky (Photo:NV)

The High Court of Justice in London has made more effective the existing worldwide order to freeze assets belonging to the ex-owners of Ukrainian state-owned PrivatBank, Ihor Kolomoisky and Gennadiy Bogolyubov, the Ekonomichna Pravda business outlet reported on Feb. 2, citing a ruling in case BL-2017−000665.

As part of the case, PrivatBank seeks the recovery of the assets withdrawn from the bank before its nationalization in December 2016, as well as repayment of outstanding refinancing obligations.

PrivatBank requested the seizure of $3 billion in the defendants' assets for the period of consideration of the case. In 2017, the High Court of Justice in London ruled in favor of the bank, which made it possible to enforce a worldwide freezing order on the assets of Kolomoisky and Bogolyubov, as well as six companies likely to be controlled by the oligarchs.

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With its decision on Jan. 31, 2023, the court in fact made the existing worldwide freezing order more effective.

In a comment to NV Business, PrivatBank’s press service said the London court’s recent ruling to authorize the bank to obtain court orders on asset freeze abroad and to require the defendants to provide further information regarding the disclosure of assets is “an extremely positive event for the bank.” This will ensure that the proper policing of a freezing order is facilitated.

The bank explained that the primary seizure order was imposed on a certain number of assets. However, information about other assets of former shareholders of the bank appeared during subsequent court hearings. The latest court ruling allows freezes on these newly uncovered assets.

According to PrivatBank, the relevant court ruling will help ensure the effective enforcement of any court decision that will be rendered after a court hearing scheduled for June 2023.

The worldwide seizure of Kolomoisky and Bogolyubov’s assets and the restriction on expenses of GBP 20,000 per week remains in force, and will hold until a decision is made by the High Court.

Additionally, Kolomoisky and Bogolyubov will now also need to coordinate any agreements on the purchase and sale of assets with PrivatBank. In addition, PrivatBank has filed lawsuits in the United States (claiming over $600 million), Israel (claiming almost $600 million), and Cyprus (claiming $5.5 billion).

In the London case, Kolomoisky and Bogolyubov are accused of withdrawing almost $2 billion — $3 billion after interest — from Privatbank without going through the proper procedures. Media reports have estimated the total fraud alleged to be committed by the two oligarchs at Privatbank at $5.5 billion, prior to its nationalization.

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